News on Virgil Development

Aurora Beacon-News
January 23, 2005

Sugar Grove developers rip plans for more fees

By Angela Fornelli
STAFF WRITER

SUGAR GROVE — Fees placed on developers in Sugar Grove could reach more than double the amount in other communities if the board approves a new type of fee discussed last week.

And some developers are speaking out in opposition to the village's high rates.

"It almost gave me a heart attack," said Ken Neumann, CEO of Neumann Homes, in response to hearing of more fees being implemented. "They've pushed the fees through the roof."

Neumann Homes is working with the village on a development that would include a golf course community and a downtown area with shopping, entertainment and central gathering places. The high fees could have a "significant impact on the marketability" of their development, Neumann said.

Comments from Neumann and other residential developers came after trustees came to a consensus that transition fees should be enacted. Transition fees would offset the cost of providing services to new residents in the usual 14-month period from when they move in to when the taxing bodies receive property tax receipts.

Funds would go mainly toward operational expenses for the Kaneland School District, although other taxing bodies, including the park district, fire district and library district, would receive a share.

Brent Eichelberger, village administrator, has said transition fees are a "relatively new" concept, and the village conducted a survey in November to determine whether other towns in Illinois have implemented such fees.

None of seven surrounding towns the village surveyed have implemented such fees, although Elburn and Montgomery have indicated they will consider the fees in the future. Some municipalities in northeastern Illinois, including Huntley and McHenry, currently charge the fees, and six other towns reported they are considering the fees.

The Kaneland School District proposed to village trustees several formulas for determining the fee amounts, and trustees supported a formula based on property values and tax rates.

Two other models are based on the per-student operating costs during the transition period, and a fourth model is based on a per-bedroom fee for each bedroom beyond the master.

Depending on the formula used, developers could be asked to pay between an additional $2,000 and $14,000 per home under the impact fee.

When developers add that to the various other fees approved by trustees within the past year, they see fees much higher than those in surrounding towns. Within the past six months, Sugar Grove trustees have approved a change in school impact fees, a commercial impact fee and increased water and sewer tap-on fees.

Neumann, whose company develops in four states, said he has never seen fees so high.

"It's going to be a very expensive place to live in Sugar Grove," he said. "We've driven low-cost housing somewhere else."

Perry Clark, executive director of the Sugar Grove Economic Development Corporation, cautioned the trustees that high fees could discourage developers from coming to the village — and send them to surrounding towns where the fees are lower.

Clark suggests the village work with developers to agree on a fee amount that would satisfy them and the school district.

Trustee Bob Bohler said although developers don't want to pay the fees, it's important for new development to pay its way.

"The value of my home is also predicated on the value of a good school district," Bohler said. "If we're going to continue to grow, we have to continue to pay our way."

Rich Young, acquisition manager for Kimball Hill Homes, which is working with the village on the Settler's Ridge subdivision, said "it would be hard for (the company) to develop in Sugar Grove" if the transition fees are enacted the way staff has proposed.

The Kaneland School Board will bring its proposed fee formulas to other towns within the district, and, after coming to a consensus between the communities, the School District will return to the Sugar Grove trustees for endorsement.